From: Ed [mailto:ebixler@BccCapital.com] 

Sent: Tuesday, January 25, 2011 7:23 PM 

To: EBSA, E-ORI - EBSA 

Cc: Robert W Smiley, Jr.; Linda Carlisle; Larry Goldberg 

Subject: Comments on Proposed Regulation Defining the Term "Fiduciary" under Section 

3(21)(A) of the Employee Retirement Income Security Act

January 25, 2011 

Mr. Fred Wong 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

U.S. Department of Labor 

200 Constitution Avenue, NW 

Washington, DC 20210 

Re: Comments on Proposed Regulation Defining the Term “Fiduciary” under Section 

3(21)(A) of the Employee Retirement Income Security Act 

Dear Mr. Wong: 

I am the Managing Partner of a firm that, among our services, provides valuation services 

to ESOP companies and fiduciaries. Our firm has been providing these services for well 

over 20 years. 

We have had the opportunity to directly observe the many benefits ESOPs provide for 

employees in the companies that sponsor ESOPs, and take our responsibilities to the 

ESOP trustees (and indirectly the plan and its participants) very seriously as they relate to 

our providing objective, independent opinions of fair market value for ESOP purposes. 

We are aware of instances in which valuations for ESOP purposes have not met the high 

standards which we believe to be appropriate for ESOPs, and in which the employeeowners and/or their sponsoring companies have not been served well. 

We believe the Department of Labor in the proposed regulation is seeking go beyond the 

existing requirements that qualified plan participants be properly served by their advisors, 

and fully support those efforts. In those parts of the proposed regulation dealing with 

valuations for ESOP purposes however, we believe the proposal is counterproductive to 

the best interests of ESOPs in general, and certainly counterproductive to the best 

interests of ESOP participants. We believe this is so because: 

a. The appropriate fiduciary for the ESOP participants is the trustee. The valuation 

advisor for the ESOP works as an advisor to the trustee in enabling the trustee to 

properly determine the value of the assets held in the ESOP trust. To establish the 

valuation advisor as an additional fiduciary will likely interfere with the objective 
nature of this relationship and may present conflicts of interest which would be to 

the detriment of the plan participants; 

b. The ESOP valuation advisor is to be a qualified, independent party in the work they 

perform for the ESOP trustee (and indirectly the plan and its participants). To establish 

the valuation advisor as another fiduciary to the ESOP plan will significantly undermine 

that independence to the detriment of the plan participants; and 

c. We believe there is a great likelihood that establishing valuation advisors as fiduciaries 

to the ESOPs for which they provide valuation services will only (1) serve to cause the 

well-established, truly qualified valuation firms to exit this market rather than risk the 

exposure and cost this requirement would impose, and (2) that the fees for any remaining 

highly qualified firms choosing to serve this market would be very high – perhaps 

unaffordable to most employee-owned companies, both to the detriment of ESOP plan 

participants. 

We respectfully request that the sections of the proposal that would cause ESOP 

valuation firms to be established as fiduciaries to the plans for which they provide 

valuation services be eliminated, and believe this would clearly be in the best interests of 

the ESOP plan participants. 

Very truly yours, 

Edward M. Bixler 

Managing Partner 

Edward M. Bixler

Managing Partner

BCC Partners, LLC

Investment Bankers & Valuation Advisors

4685 MacArthur Court, Suite 370

Newport Beach, CA 92660

(949) 833‐3767 x104

(949) 636‐1694 (cell)

www.BccCapital.com